Broadcom and backdating

As part of the deal, Broadcom will also acquire 0 million in debt from Brocade to bring the acquisition’s total value to .9 billion.

Brocade shares rose almost 10 percent to close Wednesday at .32, while Broadcom’s stock price climbed by 2.2 percent to finish the regular trading session at 1.39 as investors assessed the acquisition.

Reyes was convicted on 10 counts of backdating stock options illegally in 2007 and in 2010, was sentenced to 18 months in prison and fined million.

As a result, journalism today is populated by innumerable muckrakers, and the Justice Department by hundreds of “dockside bullies.”Bill Ruehle’s bad luck was to discover this first-hand. Ruehle was the chief financial officer (CFO) of Broadcom Communications, an Internet company founded in 1991 by “a quiet electronics engineering professor from UCLA (Henry Samueli) and his not-so-quiet student (Henry Nicholas).” Broadcom first turned a profit in 1994: revenues were .6 million.

But he “wanted to see if [he] could help guide another company from early stage to industry leader.” Broadcom met all the criteria he had set for his joining a new company, and although the job of CFO would entail his commuting from Silicon Valley to Orange County, he signed on.

The pay was tiny, but a generous option grant offered the promise of great wealth if the company succeeded.

Because the stock was so volatile, the strike price could differ by to or more—in either direction.”Ruehle does not explain as clearly as a reader might wish how this situation drove Broadcom policies regarding the use of options as compensation.The company retained the Broadcom name following that deal’s completion.“This is basically a part of ongoing industry consolidation,” said Rob Enderle, director of technology consultancy the Enderle Group.This Settlement is in addiiton to the previously approved Settlement with Broadcom (the "Broadcom Settlement"), which totalled 0.5 million.The proposed Settlement has been preliminarily approved by the Court, and Notice Packets are being mailed to potential Class Members.In addition to its switching-technology products, Brocade is also known for the controversy more than a decade ago involving former CEO Gregory Reyes.